Europe closed Tuesday in decent shape — IBEX and AEX both posting gains north of 1% — but the overnight US session flipped the script hard, with the S&P 500 dropping 1.21% and the VIX surging 12%, raising the question of whether Thursday’s European open gives back everything the region just earned.

Where Europe Closed Last Session

Tuesday’s European session was broadly positive but uneven. The IBEX 35 led the board at +1.35% to 19,421.90, with Spanish banks and industrials catching a bid. The AEX in Amsterdam followed at +1.18% to 1,082.70, helped by ASML strength. The Euro STOXX 50 added +0.68% to 6,300.07, a solid session for the eurozone benchmark.

The UK and Swiss markets posted modest gains. The FTSE 100 edged up +0.14% to 10,508.60, held back by mining and energy names that would face even heavier selling overnight. The SMI gained +0.39% to 13,815.24, with Nestlé and Roche providing ballast. Germany’s DAX 40 managed +0.10% to 24,934.67 — barely positive, with autos and chemicals offsetting industrial gains. The FTSE MIB in Milan added +0.31% to 52,595.

France was the sole outlier. The CAC 40 slipped -0.20% to 8,430.79, with luxury names under pressure as China demand questions resurfaced following Alibaba’s appearance on the Pentagon’s blacklist — a headline that won’t help LVMH or Kering sentiment at today’s open either.

US Overnight Snapshot

Wall Street delivered a clear risk-off session. The S&P 500 fell 1.21% to 7,420, the Nasdaq Composite dropped 1.34%, and the Russell 2000 lost 0.75%. The VIX jumped 12.37% to 18.4 — not panic territory, but the sharpest single-session spike in weeks and now approaching the 20 threshold that tends to keep institutional buyers on the sideline.

Sector damage was broad. Materials fell 1.33% and Energy dropped 1.25%, both directly relevant to European resource stocks. Technology held up slightly better at -0.34%, but Nasdaq’s headline decline suggests the weight came from mega-cap names — which means ASML, SAP, and Infineon will likely feel the drag at the Frankfurt open. Headlines around Apple warning of price hikes from the AI boom and questions about whether Warsh and Vance have opened the door to higher inflation added to the cautious tone.

Commodity + FX Watch

Oil collapsed 3.53% to $74.10, the sharpest single-session drop in weeks. Shell, BP, and TotalEnergies will open under immediate pressure — the FTSE 100’s energy weighting makes it particularly vulnerable. Copper fell 1.22%, a headwind for Glencore and the broader European mining complex. Gold slipped 0.78% to $4,320, pulling back after its recent run — watch Fresnillo on the FTSE 250.

On FX, AUD/USD weakened 0.36% to 0.704 as risk appetite faded. USD/JPY ticked up to 161, keeping the dollar firm. A stronger dollar weighs on euro-denominated exporters — Airbus, Siemens, and the German autos all price in dollars but report in euros. The EUR/USD direction today will matter for DAX earnings expectations heading into second-half guidance season.

What to Watch Today

• Energy sector gap-down: With WTI off 3.53% overnight, Shell and BP are likely to open sharply lower. Watch whether FTSE 100 can hold 10,500 — that was resistance for months and is now the first support test as an established level.
• China-linked luxury and tech names: Alibaba landing on the Pentagon’s blacklist adds another layer of uncertainty to European companies with significant China revenue. LVMH, Hermès, and ASML are the names to watch on the CAC and AEX.
• VIX at 18.4 — approaching the caution zone: If US futures don’t stabilize during the European session, expect hedging flows to pick up in Euro STOXX 50 options. A VIX push above 20 during US pre-market would likely cap any European recovery attempt.
• Inflation narrative shift: Headlines about Warsh and Vance potentially opening the door to higher US inflation could ripple into European rate expectations. Watch Bund yields and eurozone bank stocks for any repricing.

Bottom Line

The carry-over setup is clearly risk-off. Tuesday’s European gains will be tested immediately at the open, with oil’s 3.5% plunge and the S&P’s 1.2% decline creating headwinds across energy, materials, and export-heavy industrials. Defensive positioning — Swiss pharma, utilities, and quality-screened dividend names — looks like the safer side of the book today. Luna3 readers tracking the FTSE 100 should focus on whether 10,500 holds; a break below would signal the broader European weakness has legs beyond a single-session US wobble.

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